Govt Seeks RBI Nod For 30-Year Financing Of Infra Projects
With shrinking government funds and lagging infrastructure projects, the Road Transport and Highways Ministry is in process of seeking long-term finances for development projects. For this, Union Minister Nitin Gadkari, on December 10, 2019, said that his ministry requested the Reserve Bank of India to allow banks to finance infrastructure projects for 30 years, instead of 20 years.
Since getting bank guarantee was an issue for financing projects for such a long duration, it was agreed upon that projects would be insured, the minister added.
Over 350 Infra Projects Delayed; Cost Overrun At Rs 3.88 Lakh Crore
Around 355 infrastructure projects are showing cost overruns, with the overall cost overrun at Rs 3.88 lakh crores, Union Minister Rao Inderjit Singh said in the Lok Sabha on December 4, 2019. In 2018, around 369 infrastructure projects, showed cost overruns to the tune of over Rs 3.58 lakh crores.
These statitistics have been pulled out by the Ministry of Statistics and Programme Implementation which monitors all central sector infra projects costing Rs 150 crores and above, through an online computerised monitoring system (OCMS).
The major reasons for cost overruns, according to project implementing agencies are under-estimation of original cost, changes in rates of foreign exchange and statutory duties, high cost of environmental safeguards and rehabilitation measures. Apart from this, the union minister attributed the delays to increasing land acquisition costs, shortage of manpower, pricing monopoly by vendors and inflation.
The government said it was taking steps, to control cost escalation and timely completion of projects through periodic review, regular project appraisal and setting up OCMS for better monitoring.
With inputs from Housing.com News